SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934.
For the quarterly period ended June 30, 1997
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OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934.
For the transition period from to
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Commission file number 0-13233
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BALCOR PENSION INVESTORS-V
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(Exact name of registrant as specified in its charter)
Illinois 36-3254673
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2355 Waukegan Road
Bannockburn, Illinois 60015
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 267-1600
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Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
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<PAGE>
BALCOR PENSION INVESTORS-V
(An Illinois Limited Partnership)
BALANCE SHEETS
June 30, 1997 and December 31, 1996
(Unaudited)
ASSETS
1997 1996
-------------- ---------------
Cash and cash equivalents $ 10,101,574 $ 67,655,936
Escrow deposits - restricted 58,587 95,243
Accounts and accrued interest receivable 4,440,656 665,695
Prepaid expenses 38,651
Deferred expenses, net of accumulated
amortization of $133,699 in 1996 196,549
-------------- ---------------
14,600,817 68,652,074
-------------- ---------------
Investment in first mortgage loan
receivable 6,015,968
Less:
Allowance for potential loan losses 2,102,000
---------------
Net investment in loan receivable 3,913,968
Real estate held for sale (net of
allowance of $2,711,056 in 1996) 6,606,724
Investment in joint ventures - affiliates 3,042,286
---------------
13,562,978
-------------- ---------------
$ 14,600,817 $ 82,215,052
============== ===============
LIABILITIES AND PARTNERS' CAPITAL
Accounts and accrued interest payable $ 198,410 $ 978,110
Due to affiliates 128,004 150,580
Other liabilities, principally escrow
deposits and accrued real estate taxes 145,394
Security deposits 81,774
-------------- ---------------
Total liabilities 326,414 1,355,858
<PAGE>
BALCOR PENSION INVESTORS-V
(An Illinois Limited Partnership)
BALANCE SHEETS
June 30, 1997 and December 31, 1996
(Unaudited)
(Continued)
Commitments and contingencies
Limited Partners' capital
(439,305 Interests issued
and outstanding) 14,042,548 80,322,266
General Partner's capital 231,855 536,928
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Total partners' capital 14,274,403 80,859,194
-------------- ---------------
$ 14,600,817 $ 82,215,052
============== ===============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR PENSION INVESTORS-V
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the six months ended June 30, 1997 and 1996
(Unaudited)
1997 1996
-------------- ---------------
Income:
Interest on loans receivable and
investment in acquisition loan $ 236,661 $ 2,965,711
Less interest on loan payable -
underlying mortgage 101,121
-------------- ---------------
Net interest income on loans receivable 236,661 2,864,590
Interest on short-term investments 466,240 589,413
Participation income 30,844
Participation in income of
joint ventures-affiliates 1,291,292 217,642
Recovery of losses on loans 2,102,000 2,478,000
Other income 342,000
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Total income 4,438,193 6,180,489
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Expenses:
Loss (income) from operations of real
estate held for sale 144,221 (2,703,278)
Provision for potential losses on loans 511,415
Amortization of deferred expenses 196,549 25,174
Administrative 450,077 655,341
-------------- ---------------
Total expenses 790,847 (1,511,348)
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Income before equity in loss from
investment in acquisition loan 3,647,346 7,691,837
Equity in loss from investment
in acquisition loan (39,016)
-------------- ---------------
Net income $ 3,647,346 $ 7,652,821
============== ===============
Net income allocated to General Partner None $ 765,282
============== ===============
Net income allocated to Limited Partners $ 3,647,346 $ 6,887,539
============== ===============
Net income per Limited Partnership
Interest (439,305 issued and outstanding) $ 8.30 $ 15.68
============== ===============
<PAGE>
BALCOR PENSION INVESTORS-V
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the six months ended June 30, 1997 and 1996
(Unaudited)
(Continued)
Distributions to General Partner $ 488,116 $ 488,118
============== ===============
Settlement distribution to Limited Partners $ 99,534 None
============== ===============
Distributions to Limited Partners $ 69,827,530 $ 8,689,453
============== ===============
Distributions per Limited
Partnership Interest $ 158.95 $ 19.78
============== ===============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR PENSION INVESTORS-V
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the quarters ended June 30, 1997 and 1996
(Unaudited)
1997 1996
-------------- ---------------
Income:
Interest on loans receivable and
investment in acquisition loan $ 107,473 $ 1,922,182
Less interest on loan payable -
underlying mortgage 50,422
-------------- ---------------
Net interest income on loans receivable 107,473 1,871,760
Interest on short-term investments 111,044 346,147
Participation income 30,844
Participation in income of
joint ventures-affiliates 1,198,593 112,763
Recovery of losses on loans 2,102,000 2,478,000
Other income 342,000
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Total income 3,861,110 4,839,514
-------------- ---------------
Expenses:
Loss (income) from operations of real
estate held for sale 42,277 (1,351,494)
Provision for potential losses on loans 511,415
Amortization of deferred expenses 15,139
Administrative 159,386 486,487
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Total expenses 201,663 (338,453)
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Income before equity in loss from
investment in acquisition loan 3,659,447 5,177,967
Equity in loss from investment
in acquisition loan (19,508)
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Net income $ 3,659,447 $ 5,158,459
============== ===============
Net income allocated to General Partner $ 1,210 $ 515,846
============== ===============
Net income allocated to Limited Partners $ 3,658,237 $ 4,642,613
============== ===============
Net income per Limited Partnership
Interest (439,305 issued and outstanding) $ 8.32 $ 10.57
============== ===============
<PAGE>
BALCOR PENSION INVESTORS-V
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the quarters ended June 30, 1997 and 1996
(Unaudited)
(Continued)
Distribution to General Partner $ 244,057 $ 244,059
============== ===============
Distribution to Limited Partners $ 14,475,100 $ 6,492,928
============== ===============
Distribution per Limited
Partnership Interest $ 32.95 $ 14.78
============== ===============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR PENSION INVESTORS-V
(An Illinois Limited Partnership)
STATEMENTS OF CASH FLOWS
for the six months ended June 30, 1997 and 1996
(Unaudited)
1997 1996
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Operating activities:
Net income $ 3,647,346 $ 7,652,821
Adjustments to reconcile net income
to net cash provided
by operating activities:
Equity in loss from investment
in acquisition loan 39,016
Participation in income of
joint ventures - affiliates (1,291,292) (217,642)
Recovery of losses on loans (2,102,000) (2,478,000)
Provision for potential losses on loans 511,415
Amortization of deferred expenses 196,549 25,174
Payment of leasing commissions (102,100)
Collection of interest
income due at maturity 2,115,968 452,768
Net change in:
Escrow deposits - restricted 36,656 (39,689)
Accounts and accrued
interest receivable 401,105 (335,562)
Prepaid expenses 38,651 (224,181)
Accounts and accrued interest payable (779,700) (37,328)
Due to affiliates (22,576) 22,297
Other liabilities (145,394) 5,643
Security deposits (81,774) (1,466)
-------------- ---------------
Net cash provided by operating activities 2,013,539 5,273,166
-------------- ---------------
Investing activities:
Capital contributions to joint
ventures - affiliates (22,759)
Distributions from joint
ventures - affiliates 157,512 268,290
Collection of principal
payments on loans receivable 3,900,000 14,700,000
Improvements to real estate (161,002)
Proceeds from sale of real estate 6,900,000
Costs incurred in connection with
the sale of real estate (293,276)
-------------- ---------------
Net cash provided by investing activities 10,664,236 14,784,529
-------------- ---------------
<PAGE>
BALCOR PENSION INVESTORS-V
(An Illinois Limited Partnership)
STATEMENTS OF CASH FLOWS
for the six months ended June 30, 1997 and 1996
(Unaudited)
(Continued)
Financing activities:
Distributions to Limited Partners (69,927,064) (8,689,453)
Distributions to General Partner (488,116) (488,118)
Contribution from General Partner 183,043
Principal payments on loan payable
- underlying mortgage (20,482)
-------------- ---------------
Net cash used in financing activities (70,232,137) (9,198,053)
-------------- ---------------
Net change in cash and cash equivalents (57,554,362) 10,859,642
Cash and cash equivalents
at beginning of period 67,655,936 17,680,262
-------------- ---------------
Cash and cash equivalents at end of period $ 10,101,574 $ 28,539,904
============== ===============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR PENSION INVESTORS-V
(An Illinois Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. Accounting Policies:
(a) A reclassification has been made to the previously reported 1996 financial
statements in order to provide comparability with the 1997 statements. This
reclassification has not changed the 1996 results.
(b) In the opinion of management, all adjustments necessary for a fair
presentation have been made to the accompanying statements for the six months
and quarter ended June 30, 1997, and all such adjustments are of a normal and
recurring nature.
2. Partnership Termination:
The Partnership Agreement provides for the dissolution of the Partnership upon
the occurrence of certain events, including the disposition of all interests in
real estate. During 1996, eight properties were sold including one in which the
Partnership held a minority joint venture interest. During January and May
1997, the Partnership sold the Harbor Bay office building and the Meadow Run
Apartments loan was repaid, respectively. In addition, the Partnership's
remaining investment, the loan collateralized by the Whispering Hills
Apartments in which the Partnership held a minority joint venture interest, was
sold during June 1997. The timing of the termination of the Partnership and
final distribution of cash will depend upon the nature and extent of
liabilities and contingencies which exist or may arise. The Partnership has
retained a portion of the cash to satisfy obligations of the Partnership as
well as establish a reserve for contingencies. Such contingencies may include
legal and other fees stemming from litigation involving the Partnership
including, but not limited to, the lawsuit discussed in Note 8 of Notes to
Financial Statements. In the absence of any contingency, the reserves will be
paid within twelve months of the last investment being sold. In the event a
contingency exists, reserves may be held by the Partnership for a longer period
of time.
3. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates for the six
months and quarter ended June 30, 1997 are:
Paid
----------------------
Six Months Quarter Payable
------------ --------- ----------
Reimbursement of expenses to
the General Partner, at cost $ 94,048 $ 57,527 $ 123,114
Mortgage servicing fees 5,219 None 4,890
The General Partner made a contribution to the Partnership of $183,043 in
connection with the settlement of certain litigation as further discussed in
Note 7 of Notes to Financial Statements.
<PAGE>
4. Repayment of Loan Receivable:
The Meadow Run Apartments $3,900,000 first mortgage loan receivable was repaid
in full during May 1997. The Partnership received $6,015,968 including accrued
interest of $2,115,968 which was included in the loan balance. The Partnership
recognized a recovery of $2,102,000 upon repayment of the loan.
5. Disposition of Property Acquired Through Foreclosure:
In January 1997, the Partnership sold the Harbor Bay office building in an all
cash sale for $6,900,000. From the proceeds of the sale, the Partnership paid
$293,276 in selling costs. The basis of the property was $9,611,056. For
financial statement purposes, the Partnership did not recognize a gain or loss
on the sale of this property. The Partnership wrote off $2,711,056 of the
basis against the previously established allowance.
6. Investment in Joint Ventures - Affiliates:
a) The Partnership had classified the Whispering Hills Apartments first
mortgage loan investment as an investment in joint venture - affiliate. This
investment represented a joint venture between the Partnership and an
affiliate. Profits and losses were allocated 25% to the Partnership and 75% to
the affiliate. During June 1997, the joint venture sold the loan for
$17,200,000. From the proceeds of the sale, the joint venture paid $750,000 to
the borrower in accordance with the amendment to the modified loan agreement
and $393,305 in selling costs. In July 1997, the Partnership received a
distribution of $4,176,066 which represented its share of sales proceeds and
second quarter property operations. This amount is included in accounts
receivable in the financial statements at June 30, 1997. For financial
statement purposes, the joint venture recognized a gain of $1,793,261, of which
$1,130,640 represents the Partnership's share. The following information has
been summarized from the financial statements of the joint venture:
1997
------------
Total income $ 1,237,046
Gain on sale 1,793,261
Net income 642,612
b) The 45 West 45th Street Office Building was owned by a joint venture and
three affiliates. During November 1996, the joint venture sold the property.
Pursuant to the sale agreement, $500,000 of the sale proceeds was retained by
the joint venture and was unavailable for distribution until April 1997, at
which time the funds were released in full. The Partnership's share of the
proceeds was $108,701.
<PAGE>
7. Settlement of Litigation:
A settlement received final approval by the court in November 1996 in the class
action, Paul Williams and Beverly Kennedy, et. al. v. Balcor Pension
Investors-V, et. al. upon the terms described in the notice to class members in
September 1996. The General Partner made a contribution of $183,043 to the
Partnership from which the plaintiffs' counsel received $18,304 pursuant to the
settlement agreement. In February 1997, the General Partner made a settlement
payment of $164,739 ($0.38 per $500 Interest) to members of the class pursuant
to the settlement. Of the remaining settlement amount, $99,534 was paid to
original investors who held their Limited Partnership Interests at the date of
the settlement and was recorded as a distribution to Limited Partners in the
Financial Statements. The remaining portion of the settlement of $65,205 was
paid to original investors who previously sold their Interests in the
Partnership. This amount was recorded as an administrative expense in the
Financial Statements. The settlement had no material impact on the Partnership.
8. Contingency:
The Partnership is currently involved in a lawsuit whereby the Partnership the
General Partner and certain third parties have been named as defendants seeking
damages relating to tender offers to purchase interests in the Partnership and
nine affiliated partnerships initiated by the third party defendants in 1996.
The defendants continue to vigorously contest this action. This action has been
dismissed with prejudice and plaintiffs have filed an appeal. It is not
determinable at this time whether or not an unfavorable decision in this action
would have a material adverse impact on the financial position, operations and
liquidity of the Partnership. The Partnership believes it has meritorious
defenses to contest the claims.
9. Subsequent Event:
In July 1997, the Partnership made a distribution of $6,194,201 ($14.10 per
Interest) to the holders of Limited Partnership Interests representing a
regular quarterly distribution of Cash Flow of $5.00 per Interest for the
second quarter of 1997 and a special distribution from Mortgage Reductions of
$9.10 per Interest primarily from proceeds received from the Meadow Run
Apartments loan repayment.
<PAGE>
BALCOR PENSION INVESTORS-V
(An Illinois Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS
Balcor Pension Investors-V (the "Partnership") is a limited partnership formed
in 1983 to invest in wrap-around mortgage loans, first mortgage loans and, to a
lesser extent, junior mortgage loans. The Partnership raised $219,652,500 from
sales of Limited Partnership Interests and utilized these proceeds to fund
thirty-four loans. During January and May 1997, the Partnership sold the Harbor
Bay office building and the Meadow Run Apartments loan was repaid,
respectively. In addition, the Partnership's remaining investment, the loan
collateralized by the Whispering Hills Apartments, in which the Partnership
held a minority joint venture interest, was sold during June 1997. As of June
30, 1997, the Partnership has no loans outstanding or properties remaining in
its portfolio.
Inasmuch as the management's discussion and analysis below relates primarily to
the time period since the end of the last fiscal year, investors are encouraged
to review the financial statements and the management's discussion and analysis
contained in the annual report for 1996 for a more complete understanding of
the Partnership's financial position.
Operations
- ----------
Summary of Operations
- ---------------------
Due primarily to property sales and loan repayments in 1997 and 1996, the
Partnership generated decreased net income during the six months and quarter
ended June 30, 1997 as compared to the same periods in 1996. This decrease was
partially offset by the recognition of the Partnership's share of the gain from
the sale of the Whispering Hills Apartments loan in June 1997, which is
included in participation in income of joint venture-affiliate. Further
discussion of the Partnership's operations is summarized below.
1997 Compared to 1996
- ---------------------
Discussions of fluctuations between 1997 and 1996 refer to both the six months
and quarters ended June 30, 1997 and 1996.
Net interest income on loans receivable decreased in 1997 as compared to 1996
due primarily to the repayments of the Meadow Run Apartments loan receivable in
1997 and the Seven Trails Apartments wrap-around loan receivable in 1996, and
the sales of The Glen Apartments loan receivable and the Noland Fashion Square
acquisition loan in 1996.
Due to higher average cash balances in 1996 resulting from the repayment of the
Seven Trails Apartments loan in April of 1996, interest income on short-term
investments decreased during 1997 as compared to 1996.
<PAGE>
The Partnership recognized participation income of $30,844 on The Glen and
Meadow Run Apartments loans during 1996.
Participation in joint ventures with affiliates represents the Partnership's
share of the property operations from the Whispering Hills Apartments and the
45 West 45th Street Office Building, which was sold in November 1996. Primarily
as a result of the gain recognized on the sale of the Whispering Hills
Apartments in June 1997, participation in income of joint ventures with
affiliates increased during 1997 as compared to 1996.
Provisions are charged to income when the General Partner believes an
impairment has occurred to the value of its properties or in a borrower's
ability to repay a loan or in the value of the collateral property.
Determinations of fair value are made periodically on the basis of performance
under the terms of the loan agreement and assessments of property operations.
Determinations of fair value represent estimations based on many variables
which affect the value of real estate, including economic and demographic
conditions. The Partnership recognized a provision of $511,415 related to the
Noland Fashion Square acquisition loan during 1996. The Partnership recognized
recoveries of $2,102,000 and $2,478,000 relating to the Meadow Run and Seven
Trails apartment complexes loans during 1997 and 1996, respectively. In
addition, an allowance of $2,711,056 related to the Harbor Bay office building
was written off in connection with the sale of the property during 1997.
The Partnership recognized other income of $342,000 during 1997 in connection
with insurance proceeds received due to fire damage incurred at the Huntington
Meadows Apartments during February 1996.
Income or loss from operations of real estate held for sale represents net
property operations generated by the properties the Partnership acquired
through foreclosure. Due to the sales of seven properties in 1996 and the sale
of the Harbor Bay office building in January 1997, a loss was generated in 1997
as compared to income during 1996. The loss in 1997 resulted primarily from the
payment of expenses related to properties sold during 1996 and expenses related
to the Harbor Bay office building which was sold in January 1997.
In connection with the sale of the Harbor Bay office building during the
quarter ended March 31, 1997, the Partnership wrote-off the remaining
unamortized leasing commissions related to the property which resulted in an
increase in amortization expense during the six months ended June 30, 1997 and
the cessation of amortization expense during the quarter ended June 30, 1997 as
compared to the same periods in 1996.
Consulting, printing and postage costs incurred in connection with a response
to a tender offer during the second quarter of 1996 resulted in a decrease in
administrative expenses of approximately $185,000 during 1997 as compared to
1996. This decrease was partially offset by an increase of approximately
$65,000 due to a payment made by the General Partner in connection with the
settlement of a class action lawsuit to investors who previously sold their
Interests in the Partnership which was classified as an administrative expense.
See Note 7 of Notes to Financial Statements for additional information.
<PAGE>
The Partnership recognized equity in loss from investment in acquisition loan
during 1996 in connection with the Noland Fashion Square acquisition loan which
was sold in August 1996.
Liquidity and Capital Resources
- -------------------------------
The cash position of the Partnership decreased by approximately $57,554,000 as
of June 30, 1997 when compared to December 31, 1996 primarily due to special
distributions made to Partners in January and April 1997. Cash of approximately
$2,014,000 was generated by operating activities primarily from interest income
from the Partnership's loan receivable, short-term investments and insurance
proceeds. These receipts were partially offset by the payment of expenses
related to sold properties and administrative expenses. The Partnership's
investing activities generated cash of approximately $10,664,000, primarily
from the sale of the Harbor Bay office building and the Meadow Run Apartments
loan repayment. Cash of approximately $70,232,000 was used in financing
activities consisting primarily of distributions to Partners.
During 1996, eight of the Partnership's properties were sold including one in
which the Partnership held a minority joint venture interest. During January
and May 1997, the Partnership sold the Harbor Bay office building and the
Meadow Run Apartments loan was repaid, respectively. In addition, the
Partnership's remaining investment, the loan collateralized by the Whispering
Hills Apartments in which the Partnership held a minority joint venture
interest was sold during June 1997. The timing of the termination of the
Partnership and final distribution of cash will depend upon the nature and
extent of liabilities and contingencies which exist or may arise. The
Partnership has retained a portion of the cash to satisfy obligations of the
Partnership as well as establish a reserve for contingencies. Such
contingencies may include legal and other fees stemming from litigation
involving the Partnership including, but not limited to, the lawsuit discussed
in Note 8 of Notes to the Financial Statements. In the absence of any
contingency, the reserves will be paid within twelve months of the last
investment being sold. In the event a contingency exists, reserves may be held
by the Partnership for a longer period of time.
In January 1997, the Partnership sold the Harbor Bay office building in an all
cash sale for $6,900,000. From the proceeds of the sale the Partnership paid
$293,276 in selling costs. The net proceeds were distributed to the Limited
Partners in April 1997. See Note 5 of Notes to the Financial Statements for
additional information.
The Meadow Run Apartments first mortgage loan receivable was repaid in full in
May 1997. The loan matured in July 1996 and was extended until December 1996.
The borrower continued to make monthly payments on the loan until it was
repaid. The Partnership received proceeds of $6,015,968 consisting of funds
advanced of $3,900,000 and additional interest income of $2,115,968. The
proceeds were distributed to the Limited Partners in July 1997. See Note 4 of
Notes to Financial Statements for additional information.
The loan collateralized by the Whispering Hills Apartments, which was accounted
for as an investment in joint venture, was owned by a joint venture consisting
of the Partnership and an affiliate. In June 1997, the joint venture sold the
<PAGE>
loan in an all cash sale for $17,200,000. From the proceeds of the sale, the
joint venture paid $750,000 to the borrower in accordance with the amendment to
the modified loan agreement and $393,305 in selling costs. The net proceeds of
the sale were $16,056,695, of which $4,014,174 was the Partnership's share.
This amount was received in July 1997 and is included in accounts receivable in
the financial statements at June 30, 1997. Available proceeds are expected to
be distributed to Limited Partners in October 1997. See Note 6 of Notes to the
Financial Statements for additional information.
Pursuant to the sale agreement for the Huntington Meadows Apartments, $200,000
was retained by the Partnership and was unavailable for distribution until
February 1997, at which time the funds were released in full. Also, pursuant to
the sale agreement for the 45 West 45th Street Office Building, in which the
Partnership held a minority joint venture interest, $500,000 was retained by
the joint venture and was unavailable for distribution until April 1997, at
which time the funds were released in full. The Partnership's share of the
proceeds was $108,701.
In February 1997, the General Partner made a settlement payment of $164,739
($.38 per Interest) to members of the class pursuant to the settlement approved
by the court in November 1996 in the Paul Williams and Beverly Kennedy et. al.
v. Balcor Pension Investors-V, et. al. class action lawsuit. The General
Partner made a contribution of $183,043 to the Partnership of which the
plaintiff's counsel received $18,304 pursuant to the settlement agreement. Of
the remaining settlement amount, $99,534 was paid to the original investors who
held their Limited Partnership Interests at the date of the settlement and was
recorded as a distribution to Limited Partners in the Financial Statements. The
remaining portion of the settlement of $65,205 was paid to original investors
who previously had sold their Interests in the Partnership. This amount was
recorded as an administrative expense in the Financial Statements.
In July 1997, the Partnership paid a distribution of $6,194,201 ($14.10 per
Interest) to the holders of Limited Partnership Interests representing the
regular quarterly distribution of Cash Flow of $5.00 per Interest for the
second quarter of 1997 and a special distribution from Mortgage Reductions of
$9.10 per Interest primarily from proceeds received from the Meadow Run
Apartments loan repayment. Including the July 1997 distribution, Limited
Partners have received cash distributions totaling $772.95 per $500 Interest.
Of this amount, $425.12 has been Cash Flow from operations and $347.83
represents a return of Original Capital. In July 1997, the Partnership also
paid $183,044 to the General Partner as its distributive share of Cash Flow for
the second quarter of 1997 and made a contribution to the Early Investment
Incentive Fund of $61,015. The available proceeds from the sale of the
Whispering Hills Apartments loan are expected to be distributed in October
1997. Since all of the Partnership's properties and loans have been sold or
repaid, no additional regular quarterly distributions are expected. The General
Partner, on behalf of the Partnership, has retained what it believes is an
appropriate amount of working capital to meet current cash or liquidity
requirements which may occur.
In February 1997, the Partnership discontinued the repurchase of Interests from
Limited Partners.
<PAGE>
BALCOR PENSION INVESTORS-V
(An Illinois Limited Partnership)
PART II - OTHER INFORMATION
Item 5. Other Information
- -------------------------
Whispering Hills Apartments
- ---------------------------
As previously reported, on May 6, 1997, the first mortgage loan funded by the
Partnership and an affiliate (together, the "Participants") and collateralized
by the Whispering Hills Apartments, Overland Park, Kansas (the "Property") was
contracted to be sold by the Participants to the current owners of the
Property (the "Owners"). The sale price was $17,200,000. The Participants had
participating percentages in the loan of 25% and 75%, respectively. The Owners
assigned their interest in the agreement of sale to Metropolitan Life Insurance
Company ("Metropolitan"), and on June 30, 1997, the sale of the loan closed.
From the proceeds of the sale, the Participants paid closing costs of $49,305
and $344,000 as a sale commission to an unaffiliated party which provided
property management services for other properties owned by the Partnership. In
addition, pursuant to the terms of the 1989 loan modification agreement and the
1991 amendment to the loan modification agreement, the Participants made a
payment of $750,000 to the borrower out of the proceeds of the sale. The
Participants received the remaining proceeds of $16,056,695. The Partnership's
share of the total net proceeds is $4,014,174. In addition to the sale price,
the Participants received $77,000 representing the Property's net cash flow for
the period May 1, 1997 through the closing date, of which $19,250 represents
the Partnership's share.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits:
(4) Form of Subscription Agreement set forth as Exhibit 4.1 to Amendment No. 1
dated January 16, 1984 to the Partnership's Registration Statement on Form S-11
(Registration No. 2-87662) and Form of Confirmation regarding Interests in the
Registrant set forth as Exhibit 4.2 to the Partnership's Report on Form 10-Q
for the quarter ended September 31, 1992 (Commission File No. 0-13233) are
incorporated herein by reference.
(10)(a)(i) Agreement of Sale and attachments thereto relating to the sale of
the Granada Apartments, Tampa, Florida previously filed as Exhibit (2)(a)(i) to
the Partnership's Current Report on Form 8-K dated September 17, 1996 is
incorporated herein by reference.
(ii) First Amendment to Agreement of Sale relating to the sale of the Granada
Apartments, Tampa, Florida previously filed as Exhibit (2)(a)(ii) to the
Partnership's Current Report on Form 8-K dated September 17, 1996 is
incorporated herein by reference.
<PAGE>
(iii) Letter Agreement dated October 7, 1996, relating to the sale of the
Granada Apartments, Tampa, Florida previously filed as Exhibit (99)(b) to the
Partnership's Current Report on Form 8-K dated October 3, 1996 is incorporated
herein by reference.
(iv) Second Amendment to Agreement of Sale relating to the sale of Granada
Apartments, Tampa, Florida previously filed as Exhibit (10)(a)(iv) to the
Partnership's Current Report on Form 10-Q for the quarter ended September 30,
1996, is incorporated herein by reference.
(b)(i) Agreement of Sale and attachments thereto relating to the sale of the
Plantation Apartments, Tampa, Florida previously filed as Exhibit (2)(b)(i) to
the Partnership's Current Report on Form 8-K dated September 17, 1996 is
incorporated herein by reference.
(ii) First Amendment to Agreement of Sale relating to the sale of the
Plantation Apartments, Tampa, Florida previously filed as Exhibit (2)(b)(ii) to
the Partnership's Current Report on Form 8-K dated September 17, 1996 is
incorporated herein by reference.
(iii) Letter Agreement dated October 7, 1996, relating to the sale of the
Plantation Apartments, Tampa, Florida previously filed as Exhibit (99)(c) to
the Partnerships Current Report on Form 8-K dated October 3, 1996 is
incorporated herein by reference.
(iv) Second Amendment to Agreement of Sale relating to the sale of Plantation
Apartments, Tampa, Florida previously filed as Exhibit (10)(b)(iv) to the
Partnership's Current Report on Form 10-Q for the quarter ended September 30,
1996, is incorporated herein by reference.
(c)(i) Agreement of Sale and attachments thereto relating to the sale of the
The Glades on Ulmerton Apartments, Largo, Florida previously filed as Exhibit
(2)(c)(i) to the Partnership's Current Report on Form 8-K dated September 17,
1996 is incorporated herein by reference.
(ii) First Amendment to Agreement of Sale relating to the sale of the The
Glades on Ulmerton Apartments, Largo, Florida previously filed as Exhibit
(2)(c)(ii) to the Partnership's Current Report on Form 8-K dated September 17,
1996 is incorporated herein by reference.
(iii) Letter Agreement dated October 7, 1996, relating to the sale of the The
Glades on Ulmerton Apartments, Largo, Florida previously filed as Exhibit
(99)(d) to the Partnership's Current Report on Form 8-K dated October 3, 1996
is incorporated herein by reference.
(d)(i) Agreement of Sale and attachments thereto relating to the sale of the
Union Tower office building, Lakewood, Colorado previously filed as Exhibit (2)
to the Partnership's Current Report on Form 8-K dated October 10, 1996 is
incorporated herein by reference.
(ii) First Amendment to Agreement of Sale relating to the sale of the Union
Tower office building, Lakewood, Colorado previously filed as Exhibit
(10)(d)(ii) to the Partnership's Current Report on Form 10-Q for the quarter
ended September 30, 1996, is incorporated herein by reference.
<PAGE>
(e) Purchase and Sale Agreement relating to the sale of the first mortgage loan
secured by The Glen Apartments, Fairfax County, Virginia previously filed as
Exhibit (10)(e) to the Partnership's Current Report on Form 10-K for the
quarter ended December 31, 1996, is incorporated herein by reference.
(f)(i) Agreement of Sale and attachments thereto relating to the sale of the
1420 Harbor Bay Parkway, Alameda, California previously filed as Exhibit (2)(a)
to the Partnership's Current Report on Form 8-K dated December 6, 1996 is
incorporated herein by reference.
(ii) First Amendment to Agreement of Sale relating to the sale of the 1420
Harbor Bay Parkway, Alameda, California previously filed as Exhibit (2)(b) to
the Partnership's Current Report on Form 8-K dated December 6, 1996 is
incorporated herein by reference.
(iii) Second Amendment to Agreement of Sale relating to the sale of the 1420
Harbor Bay Parkway, Alameda, California previously filed as Exhibit
(10)(f)(iii) to the Partnership's Current Report on Form 10-K for the quarter
ended December 31, 1996, is incorporated herein by reference.
(iv) Third Amendment to Agreement of Sale relating to the sale of the 1420
Harbor Bay Parkway, Alameda, California previously filed as Exhibit (10)(f)(iv)
to the Partnership's Current Report on Form 10-K for the quarter ended December
31, 1996, is incorporated herein by reference.
(g)(i) Agreement to Purchase Loan Documents relating to the sale of first
mortgage loan secured by Whispering Hills Apartments, Overland Park, Kansas
previously filed as Exhibit 10(g) to the Registrant's Current Report on Form
10-Q for the quarter ended March 31, 1997, is incorporated herein by reference.
(ii) First Amendment to Agreement to Purchase Loan Documents related to the
sale of the loan collateralized by the Whispering Hills Apartments, Overland
Park, Kansas, is attached hereto.
(16) Letter from Ernst & Young LLP dated September 19, 1995 regarding the
change in the Partnership's certifying accountant previously filed as Exhibit
16 to the Partnerships Report on Form 8-K/A dated October 27, 1995 (Commission
File No. 0-13233) is hereby incorporated herein by reference.
(27) Financial Data Schedule of the registrant for the quarter ending June 30,
1997 is attached hereto.
(b) Reports on Form 8-K: No reports were filed on Form 8-K during the quarter
ended June 30, 1997.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BALCOR PENSION INVESTORS-V
By: /s/ Thomas E. Meador
----------------------------------------
Thomas E. Meador
President and Chief Executive Officer
(Principal Executive Officer) of Balcor
Mortgage Advisors-V, the General Partner
By: /s/ Jayne A. Kosik
----------------------------------------
Jayne A. Kosik
Managing Director and Chief Financial
Officer (Principal Accounting Officer) of
Balcor Mortgage Advisors-V, the General
Partner
Date: August 12, 1997
------------------
<PAGE>
FIRST AMENDMENT TO AGREEMENT TO
PURCHASE LOAN DOCUMENTS
THE FIRST AMENDMENT (this "Amendment") is made as of the 23rd day of May,
1997, by and between BALCOR MORTGAGE ADVISORS, INC. ("Balcor") and MICHAEL P.
HARRIS, ARNOLD L. PORATH, JOHN P. LOWNEY, JR. and KAY S. LOWNEY, AS TRUSTEES OF
THE JKL TRUST, and STEPHEN D. MOSES (collectively, "Purchaser").
RECITALS
A. Balcor and Purchaser are parties to that certain Agreement to
Purchase Loan Documents made as of the 23rd day of April, 1997 (this
"Agreement").
B. Purchaser desires to extend the Closing Date of the Agreement and
Balcor is agreeable to extending the Closing Date subject to the terms and
conditions set forth in this Amendment.
NOW, THEREFORE, for and in consideration of the foregoing recitals and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. Capitalized terms used but not defined in this Amendment shall have
the meanings assigned to them in the Agreement.
2. The Closing Date, as defined in paragraph 4 of the Agreement, is
hereby amended to mean and refer to June 30, 1997, or such earlier date
approved by Balcor and Porath on behalf of all of the Purchasers, without
further right to extend. In addition, the Positive Cash Flow Letter (Exhibit E
to the Agreement) is hereby amended by replacing, where appropriate, the proper
dates and months to be consistent with a Closing Date of June 30, 1997.
3. Concurrently with the execution of this Amendment, the parties shall
execute the attached First Amendment to Escrow Agreement and deliver same to
the Escrow Agent and each other by facsimile transmission.
4. All other terms and provisions of the Agreement shall remain in full
force and effect to the extent not inconsistent with the above amendments.
5. This Amendment may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Execution and delivery of this Amendment by
exchange of facsimile copies bearing the facsimile signature of a party shall
constitute a valid and binding execution and delivery of this Amendment by such
party. Such facsimile copy shall constitute enforceable original documents.
<PAGE>
IN WITNESS WHEREOF, the parties have each caused this Amendment to be duly
executed as of the day and year first above written.
BALCOR MORTGAGE ADVISORS, INC.
By: /s/ Terri Thompson
--------------------------------
Name: Terri Thompson
--------------------------------
Its: Authorized Representive
--------------------------------
PURCHASER:
/s/ Michael P. Harris
--------------------------------------
MICHAEL P. HARRIS
/s/ Arnold L. Porath
--------------------------------------
ARNOLD L. PORATH
/s/ John P. Lowney, Jr.
--------------------------------------
JOHN P. LOWNEY, JR. AS TRUSTEE OF THE
JKL TRUST
/s/ Kay S. Lowney
--------------------------------------
KAY S. LOWNEY, AS TRUSTEE OF THE JKL
TRUST
/s/ Stephen D. Moses
--------------------------------------
STEPHEN D. MOSES
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 10102
<SECURITIES> 0
<RECEIVABLES> 4441
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 14601
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 14601
<CURRENT-LIABILITIES> 327
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 14274
<TOTAL-LIABILITY-AND-EQUITY> 14601
<SALES> 0
<TOTAL-REVENUES> 4438
<CGS> 0
<TOTAL-COSTS> 144
<OTHER-EXPENSES> 647
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 3647
<INCOME-TAX> 0
<INCOME-CONTINUING> 3647
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3647
<EPS-PRIMARY> 8.30
<EPS-DILUTED> 8.30
</TABLE>
